30.15—Q-15: What actions are necessary for a TARP recipient to comply with certification requirements of section 111(b)(4) of EESA?
(a)
Certification
Requirements —(1) General. To
comply with section 111(b)(4) of EESA, the PEO and
the PFO of the TARP recipient must provide the
following certifications with respect to the
compliance of the TARP recipient with section 111
of EESA as implemented under this part:
(2)
First Fiscal Year
Certification. (i) Within ninety days of the
completion of the first annual fiscal year of the
TARP recipient any portion of which is a TARP
period, the PEO and the PFO of the TARP recipient
must provide certifications similar to the model
provided in appendix A to this section.
(ii)
If the first annual fiscal year of a TARP
recipient any portion of which is a TARP period
ends within thirty days after the closing date of
the applicable agreement between the TARP
recipient and Treasury, the TARP recipient shall
have an additional sixty days beginning on the day
after the end of the fiscal year during which it
can establish the compensation committee, if not
already established, and during which the
compensation committee shall meet with senior risk
officers to discuss, review, and evaluate the SEO
compensation plans and employee compensation plans
in accordance with § 30.4 (Q-4) of this part. The
certifications of the PEO and the PFO of the TARP
recipient must be amended to reflect the timing of
the establishment and reviews of the compensation
committee.
(3)
Years Following First Fiscal Year
Certification. Within ninety days of the
completion of each TARP fiscal year of the TARP
recipient after the first TARP fiscal year, the
PEO and the PFO of the TARP recipient must provide
a certification similar to the model provided in
Appendix B to this section.
(4) Location.
A TARP recipient
with securities registered with the SEC pursuant
to the Federal securities law must provide these
certifications as an exhibit (pursuant to Item
601(b)(99)(i) of Regulation S-K under the Federal
securities laws ( 17 CFR 229.601(b)(99)(i)) to the
TARP recipient's annual report on Form 10-K and to
Treasury. To the extent that the PEO or the PFO of
the TARP recipient is unable to provide any of
these certifications in a timely manner, the PEO
or the PFO must provide Treasury an explanation of
the reason such certification has not been
provided. These certifications are in addition to
the compensation committee certifications required
by § 30.5 (Q-5) of this part.
(5)
Application to private TARP
recipients. The rules provided in this section
are also applicable to TARP recipients that do not
have securities registered with the SEC pursuant
to the Federal securities laws, except that the
certifications under Appendix A, paragraph (x) and
Appendix B, paragraph (x) of this section are not
required for such TARP recipients. A private TARP
recipient must provide these certifications to its
primary regulatory agency and to Treasury.
(6)
Application to TARP recipients
that have never had an obligation. For those
TARP recipients that have never had an obligation,
the PEO and PFO must provide the certifications
pursuant to this paragraph (a) only with respect
to the requirements applicable to a TARP recipient
that has never had an obligation (generally
certain compensation committee reviews of employee
compensation plans and the issuance of, and
compliance with, an excessive or luxury expenses
policy).
(b) Recordkeeping requirements.
The TARP recipient must preserve appropriate
documentation and records to substantiate each
certification required under paragraph (a) of this
section for a period of not less than six years
after the date of the certification, the first two
years in an easily accessible place. The TARP
recipient must furnish promptly to Treasury
legible, true, complete, and current copies of the
documentation and records that are required to be
preserved under paragraph (b) of this section that
are requested by any representative of
Treasury.
(c)
Penalties for making or providing
false or fraudulent Statements. Any individual
or entity that provides information or makes a
certification to Treasury pursuant to the Interim
Final Rule or as required pursuant to 31 CFR Part
30 may be subject to 18 U.S.C. 1001, which
generally prohibits the making of any false or
fraudulent statement in a matter within the
jurisdiction of the Federal government. Upon
receipt of information indicating that any
individual or entity has violated any provision of
title 18 of the U.S. Code or other provision of
Federal law, Treasury shall refer such information
to the Department of Justice and the Special
Inspector General for the Troubled Asset Relief
Program.
Appendix A to § 30.15—Model
Certification for First Fiscal Year
Certification
“I, [identify certifying individual], certify,
based on my knowledge, that:
(i) The compensation committee of [identify
TARP recipient] has discussed, reviewed, and
evaluated with senior risk officers at least every
six months during the period beginning on the
later of September 14, 2009, or ninety days after
the closing date of the agreement between the TARP
recipient and Treasury and ending with the last
day of the TARP recipient's fiscal year containing
that date (the applicable period), the senior
executive officer (SEO) compensation plans and the
employee compensation plans and the risks these
plans pose to [identify TARP recipient];
(ii) The compensation committee of [identify
TARP recipient] has identified and limited during
the applicable period any features of the SEO
compensation plans that could lead SEOs to take
unnecessary and excessive risks that could
threaten the value of [identify TARP recipient],
and during that same applicable period has
identified any features of the employee
compensation plans that pose risks to [identify
TARP recipient] and has limited those features to
ensure that [identify TARP recipient] is not
unnecessarily exposed to risks;
(iii) The compensation committee has reviewed,
at least every six months during the applicable
period, the terms of each employee compensation
plan and identified any features of the plan that
could encourage the manipulation of reported
earnings of [identify TARP recipient] to enhance
the compensation of an employee, and has limited
any such features;
(iv) The compensation committee of [identify
TARP recipient] will certify to the reviews of the
SEO compensation plans and employee compensation
plans required under (i) and (iii) above;
(v) The compensation committee of [identify
TARP recipient] will provide a narrative
description of how it limited during any part of
the most recently completed fiscal year that
included a TARP period the features in
(A) SEO compensation plans that could lead SEOs
to take unnecessary and excessive risks that could
threaten the value of [identify TARP
recipient];
(B) Employee compensation plans that
unnecessarily expose [identify TARP recipient] to
risks; and
(C) Employee compensation plans that could
encourage the manipulation of reported earnings of
[identify TARP recipient] to enhance the
compensation of an employee;
(vi) [Identify TARP recipient] has required
that bonus payments, as defined in the regulations
and guidance established under section 111 of EESA
(bonus payments), of the SEOs and twenty next most
highly compensated employees be subject to a
recovery or “clawback” provision during any part
of the most recently completed fiscal year that
was a TARP period if the bonus payments were based
on materially inaccurate financial statements or
any other materially inaccurate performance metric
criteria;
(vii) [Identify TARP recipient] has prohibited
any golden parachute payment, as defined in the
regulations and guidance established under section
111 of EESA, to an SEO or any of the next five
most highly compensated employees during the
period beginning on the later of the closing date
of the agreement between the TARP recipient and
Treasury or June 15, 2009 and ending with the last
day of the TARP recipient's fiscal year containing
that date;
(viii) [Identify TARP recipient] has limited
bonus payments to its applicable employees in
accordance with section 111 of EESA and the
regulations and guidance established thereunder
during the period beginning on the later of the
closing date of the agreement between the TARP
recipient and Treasury or June 15, 2009 and ending
with the last day of the TARP
recipient's fiscal year containing that date, [for recipients of exceptional
assistance: and has received or is in the
process of receiving approvals from the Office of
the Special Master for TARP Executive Compensation
for compensation payments and structures as
required under the regulations and guidance
established under section 111 of EESA, and has not
made any payments inconsistent with those approved
payments and structures];
(ix) The board of directors of [identify TARP
recipient] has established an excessive or luxury
expenditures policy, as defined in the regulations
and guidance established under section 111 of
EESA, by the later of September 14, 2009, or
ninety days after the closing date of the
agreement between the TARP recipient and Treasury;
this policy has been provided to Treasury and its
primary regulatory agency; [identify TARP
recipient] and its employees have complied with
this policy during the applicable period; and any
expenses that, pursuant to this policy, required
approval of the board of directors, a committee of
the board of directors, an SEO, or an executive
officer with a similar level of responsibility
were properly approved;
(x) [Identify TARP recipient] will permit a
non-binding shareholder resolution in compliance
with any applicable Federal securities rules and
regulations on the disclosures provided under the
Federal securities laws related to SEO
compensation paid or accrued during the period
beginning on the later of the closing date of the
agreement between the TARP recipient and Treasury
or June 15, 2009 and ending with the last day of
the TARP recipient's fiscal year containing that
date;
(xi) [Identify TARP recipient] will disclose
the amount, nature, and justification for the
offering during the period beginning on the later
of the closing date of the agreement between the
TARP recipient and Treasury or June 15, 2009 and
ending with the last day of the TARP recipient's
fiscal year containing that date of any
perquisites, as defined in the regulations and
guidance established under section 111 of EESA,
whose total value exceeds $25,000 for any employee
who is subject to the bonus payment limitations
identified in paragraph (viii);
(xii) [Identify TARP recipient] will disclose
whether [identify TARP recipient], the board of
directors of [identify TARP recipient], or the
compensation committee of [TARP recipient] has
engaged during the period beginning on the later
of the closing date of the agreement between the
TARP recipient and Treasury or June 15, 2009 and
ending with the last day of the TARP recipient's
fiscal year containing that date, a compensation
consultant; and the services the compensation
consultant or any affiliate of the compensation
consultant provided during this period;
(xiii) [Identify TARP recipient] has prohibited
the payment of any gross-ups, as defined in the
regulations and guidance established under section
111 of EESA, to the SEOs and the next twenty most
highly compensated employees during the period
beginning on the later of the closing date of the
agreement between the TARP recipient and Treasury
or June 15, 2009 and ending with the last day of
the TARP recipient's fiscal year containing that
date;
(xiv) [Identify TARP recipient] has
substantially complied with all other requirements
related to employee compensation that are provided
in the agreement between [identify TARP recipient]
and Treasury, including any amendments;
(xv) [Identify TARP recipient] has submitted to
Treasury a complete and accurate list of the SEOs
and the twenty next most highly compensated
employees for the current fiscal year and the most
recently completed fiscal year, with the non-SEOs
ranked in descending order of level of annual
compensation, and with the name, title, and
employer of each SEO and most highly compensated
employee identified; and[.]
(xvi) I understand that a knowing and willful
false or fraudulent statement made in connection
with this certification may be punished by fine,
imprisonment, or both. (See, for
example, 18 U.S.C. 1001.)”
Appendix B to § 30.15—Model
Certification for Years Following First Fiscal
Year Certification
“I, [identify certifying individual], certify,
based on my knowledge, that:
(i) The compensation committee of [identify
TARP recipient] has discussed, reviewed, and
evaluated with senior risk officers at least every
six months during any part of the most recently
completed fiscal year that was a TARP period,
senior executive officer (SEO) compensation plans
and employee compensation plans and the risks
these plans pose to [identify TARP recipient];
(ii) The compensation committee of [identify
TARP recipient] has identified and limited during
any part of the most recently completed fiscal
year that was a TARP period any features of the
SEO compensation plans that could lead SEOs to
take unnecessary and excessive risks that could
threaten the value of [identify TARP recipient]
and has identified any features of the employee
compensation plans that pose risks to [identify
TARP recipient] and has limited those features to
ensure that [identify TARP recipient] is not
unnecessarily exposed to risks;
(iii) The compensation committee has reviewed,
at least every six months during any part of the
most recently completed fiscal year that was a
TARP period, the terms of each
employee compensation plan and identified any
features of the plan that could encourage the
manipulation of reported earnings of [identify
TARP recipient] to enhance the compensation of an
employee, and has limited any such features;
(iv) The compensation committee of [identify
TARP recipient] will certify to the reviews of the
SEO compensation plans and employee compensation
plans required under (i) and (iii) above;
(v) The compensation committee of [identify
TARP recipient] will provide a narrative
description of how it limited during any part of
the most recently completed fiscal year that was a
TARP period the features in
(A) SEO compensation plans that could lead SEOs
to take unnecessary and excessive risks that could
threaten the value of [identify TARP
recipient];
(B) Employee compensation plans that
unnecessarily expose [identify TARP recipient] to
risks; and
(C) Employee compensation plans that could
encourage the manipulation of reported earnings of
[identify TARP recipient] to enhance the
compensation of an employee;
(vi) [Identify TARP recipient] has required
that bonus payments to SEOs or any of the next
twenty most highly compensated employees, as
defined in the regulations and guidance
established under section 111 of EESA (bonus
payments), be subject to a recovery or “clawback”
provision during any part of the most recently
completed fiscal year that was a TARP period if
the bonus payments were based on materially
inaccurate financial statements or any other
materially inaccurate performance metric
criteria;
(vii) [Identify TARP recipient] has prohibited
any golden parachute payment, as defined in the
regulations and guidance established under section
111 of EESA, to a SEO or any of the next five most
highly compensated employees during any part of
the most recently completed fiscal year that was a
TARP period;
(viii) [Identify TARP recipient] has limited
bonus payments to its applicable employees in
accordance with section 111 of EESA and the
regulations and guidance established thereunder
during any part of the most recently completed
fiscal year that was a TARP period [for
recipients of exceptional assistance] and has
received or is in the process of receiving
approvals from the Office of the Special Master
for TARP Executive Compensation for compensation
payments and structures as required under the
regulations and guidance established under section
111 of EESA, and has not made any payments
inconsistent with those approved payments and
structures;
(ix) [Identify TARP recipient] and its
employees have complied with the excessive or
luxury expenditures policy, as defined in the
regulations and guidance established under section
111 of EESA, during any part of the most recently
completed fiscal year that was a TARP period; and
any expenses that, pursuant to the policy,
required approval of the board of directors, a
committee of the board of directors, an SEO, or an
executive officer with a similar level of
responsibility were properly approved;
(x) [Identify TARP recipient] will permit a
non-binding shareholder resolution in compliance
with any applicable Federal securities rules and
regulations on the disclosures provided under the
Federal securities laws related to SEO
compensation paid or accrued during any part of
the most recently completed fiscal year that was a
TARP period;
(xi) [Identify TARP recipient] will disclose
the amount, nature, and justification for the
offering, during any part of the most recently
completed fiscal year that was a TARP period, of
any perquisites, as defined in the regulations and
guidance established under section 111 of EESA,
whose total value exceeds $25,000 for any employee
who is subject to the bonus payment limitations
identified in paragraph (viii);
(xii) [Identify TARP recipient] will disclose
whether [identify TARP recipient], the board of
directors of [identify TARP recipient], or the
compensation committee of [identify TARP
recipient] has engaged during any part of the most
recently completed fiscal year that was a TARP
period a compensation consultant; and the services
the compensation consultant or any affiliate of
the compensation consultant provided during this
period;
(xiii) [Identify TARP recipient] has prohibited
the payment of any gross-ups, as defined in the
regulations and guidance established under section
111 of EESA, to the SEOs and the next twenty most
highly compensated employees during any part of
the most recently completed fiscal year that was a
TARP period;
(xiv) [Identify TARP recipient] has
substantially complied with all other requirements
related to employee compensation that are provided
in the agreement between [identify TARP recipient]
and Treasury, including any amendments;
(xv) [Identify TARP recipient] has submitted to
Treasury a complete and accurate list of the SEOs
and the twenty next most highly compensated
employees for the current fiscal year, with the
non-SEOs ranked in descending order of level of
annual compensation, and with the name, title, and
employer of each SEO and most highly compensated
employee identified; and”.
(xvi) I understand that a knowing and willful
false or fraudulent statement made in connection
with this certification may be punished by fine, imprisonment, or both. (See, for example 18 U.S.C. 1001.)”